Lawyer up on your way into the cloud
Asian IT directors advise getting legal brains to read the fine print before vaporising IT
IT leaders have stressed the need for firms to carry out rigorous due diligence on cloud providers, warning that dishonest sales tactics, hidden extra costs, latency and governance issues could ruin key projects.
Speaking at the 3rd MIG Cloud Computing Executive Roundtable in Hong Kong last week, Wayne Moy, IT director for marketing organisation DDB Group, said he looked to the cloud in order to cut down on costly hardware and software duplication in his company.
“We calculated that return on investment would be great and we could get large savings from putting our email in the cloud, but when we moved there were lots of problems,” he cautioned.
“The sales staff would say ‘we can do all of these things’ but when we came to it they either couldn’t do those things or there were many side effects. You really have to look at the fine print on what they can offer and ask, ‘can they actually provide that at the end?’.”
He added that IT managers should get the legal department involved or hire a team with experience of IT projects, in order to make sure assurances are kept once the deal is signed.
“Besides IT related agreements like SLAs, legal items like who owns the data, country legislative jurisdiction, and non-disclosure needs to be addressed in the contract,” he argued.
Geofrey Master, Asia head of the business and technology sourcing practice at law firm Mayer Brown, added that the implementation contract is one of the most common weakest links in a cloud project.
“Cloud is exciting but frequently it’s not a case of comparing apples to apples,” he said.
“It’s important to peel back any mystery and get back to basics – there’s a service provider and a service recipient and you need to go through the same analysis you always do.”
Most of the IT directors speaking at the conference said their journey to the cloud had begun with baby steps, usually by virtualising some part of their in-house servers,but people and processes were highlighted as typical obstacles.
“A big cultural change has to happen especially among your developer community,” argued Dev Kohol, executive director of enterprise infrastructure at Morgan Stanley.
“They don’t understand when you move to a service-oriented delivery model you become more restricted. You can’t just call up the local sys admin or database guy and ask them to add this or that feature.”
Sunny Lee, executive IT director for the Hong Kong Jockey Club, explained a novel approach to getting customer buy-in.
“We’ve started charging a service fee for our physical and virtual servers but we’ve made the virtual service deliberately cheaper and it works,” he said. “It’s a good starting point to get people used to this new operating environment.”
Others seemed to be taking longer to adjust.
Asia Pacific CIO of FedEx Express, Alison Dack, said that while executive buy-in was relatively painless, the process side has been more complex.
“We’ve got to the point where we’re delivering agility and we can bring services together and it takes just three months to deliver, but then it’ll take 18 months to go through the processes,” she explained.
“While we’re delivering much more agile lifecycle the processes are not there.”
The majority of the ten IT directors paraded on stage at the event had investments in both public and private cloud services with the ratio always skewed towards the private.
The old classics of latency, governance and security were raised as potential reasons for not investing further in public clouds for now.
“I have a 100+ applications running. If I move some of them into the public cloud how am I going to integrate them with my other apps running in my private datacentre?” said Ted Suen, head of IT at subway operator MTR Corporation.
“There are governance and regulatory issues here – a strategic roadmap is really important.”
FedEx’s Dack explained that the firm has a cloud datacentre in Colorado Springs but another in Singapore as “there will always be apps that need to be here because of latency”, while Morgan Stanley’s Kohol admitted “there’s no way we’ll move our high frequency trading apps out of datacentres in metro areas”.
It seems that, at least when it comes to public cloud services, the vendor hype is still somewhat distorting the true picture of take-up on the ground. ®
COMMENTS
worrying
That senior management and especially directors are following the herd and buying into "cloud computing".
If they are serious about saving money on hardware and duplication, they could have gone the "thin client" route years ago but few understood it!
Re: Moral of the story
Salesmen will tell you their product shits rainbows if it will close the deal but if it's not actually in the contractual T&Cs you're not getting it.
Once you sign, those sales guys are onto the next target and you're left with delivery teams that deliver to the contract... not what Joe salesman told you over beers and strippers what he could do for you.
Moral of the story
Whenever someone says ‘we can do all of these things’ get it in writing. With a clause detailing what happens if (when) it turns out they can't do any of those things. If you absolutely must sign away key parts of your infrastructure, take a Devil's Advocate approach to the contract - assume the other party's intent is the utter ruination of your business while still sticking to the letter of the agreement, then squeeze the terms until that is not an option.
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